Spousal Support - Taxes?

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SadAndTired

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So stbx paid me random amounts of monthly money in 2011 when we separated. No agreement therefore it was "unspecified" support. (He did also pay a separate amount of monthly child support.)

After discussion with my lawyer, I agreed to specify this money as spousal support as the income deduction for ex would be significant and taxes owed for me would be minimal.

Yes, I met with an accountant, etc.

But, my lawyer said that the Family Law (Rules? Act?) specify that to amend his taxes for 2011, he had to refile them by December 31, 2012. That there is not the 10 years for identifying spousal support as there are for other tax situations. He quoted the specific section of the tax rule/law.

My question, did ex have to get it to CRA by Dec 31, 2012 or is it simply good enough that we signed it by Dec 31? He didn't mail it in yet.

I can ask my lawyer next week but was curious today. :)

Thanks.
 
Funny- I was just reading the CRA website about CS and SS is included int he same section... see here

A note on that page states:

Note
If your court order or written agreement acknowledges support paid for your spouse or common-law partner in a year for which you have already filed an income tax and benefit return, you can ask for an adjustment (see How to change your return).
Click to expand...

It then leads you to this page, which just states the 10 year rule... I did not see anywhere that is stated that they only gave you a year, for the simple fact, that some pay SS for 2-3 years before there is a concrete court order, in which case they are then allowed to redo their taxes.
 
Hey Berner

I know. I called CRA myself and they told me the ten year rule as well but in our case conference, both ex's lawyer and mine said only 1 year for spousal support without an agreement. (We still have none.) That is why ex wanted guidance because his year was up.

When I called my lawyer and said CRA told me 10 years he said no, definitely not. That there is a specific rule for spousal support and it is only a year. My lawyer quoted a section of it but I was at work and distracted and only got the part that it had to be done before Dec 31 but not whether it had to be filed by then.

I know, weird.
 
Sorry, to further clarify, in our case conference, both my lawyer and I tried to put the matter off into the new year as we were both pretty busy. Ex's lawyer said no, it has to be done right away.

My lawyer researched it and found out/told me his lawyer was correct. Thus the need for me to sign asap. I did but ex didn't send it in.

I wonder now if he has screwed himself?
 
Family court and the family law act have no power over CRA or tax law. The one place they intermingle, the CRA will require proof that money paid was actually spousal support, and not, for example, a gift or repayment of a personal debt. To be tax deductable the nature of the payment has to be verifiable. The only practical way to verify this is to have a separation agreement or court order to set out spousal support payments.

I believe what your lawyers are saying is that money that was paid before the agreement/order was signed would only be retroactive one year.

The statement "But, my lawyer said that the Family Law (Rules? Act?) specify that to amend his taxes for 2011, he had to refile them by December 31, 2012" is false; you may refile within ten years if you have reason and documentation. It sounds like you either misheard or misunderstood your lawyer, or you lawyer misunderstood exactly what it was that was limited to a year.

You and your ex should register your family support payments with the CRA using this form.

If you and your ex are co-operating, then have your separation agreement spell out that there was a retroactive support payment made for the period pre-dating the agreement. Between the two of you, agree that the amount he paid will be this amount that is specified, and you will acknowledge receipt of that money. Then use this form to apply the retroactive payment (which was actually the intermittant payments he made before the agreement) to his taxes.

Please read the second form I linked to carefully, and note that spousal support payments are certainly qualifying and notice that the payments can go back many years.

As well, you should consult an accountant about how to deal with tax implications, not a divorce lawyer. There are specialist lawyers in tax law, those are not divorce lawyers.
 
Hey Mess

You are correct that I may have misheard but likely I am simply not explaining myself correctly. Kind of hard to get a real answer if I am not using the right terminology. LOL.

I had to go to my lawyer's office and sign two forms. One saying I had received the money, the total amount, etc. and another acknowledging that my lawyer had explained the implications of acknowledging receipt of it.

There was an temporary separation agreement for that period to sign and my lawyer had a page to sign.

The agreement and receipt specifically say "periodic payments". It isn't considered lump sum at all.

I will call the lawyer on Monday and get clarification and follow up here. I do agree that it seems sort of odd. It was a lot of running around and waste of time if he really had 10 years to do it. Our cc was mid December and I had to take time off of work to see an accountant, etc. right before Christmas so it was done before the lawyer went on holidays.

PS. There is no agreement and likely will be no further agreements until we go to court. Stbx agrees that some support is required but we disagree on how much. I likely qualify quite clearly for compensatory support.
 
I would not call the lawyer because it is the verbal communication that is causing this confusion. Email the lawyer and in a firm but friendly way, insist that if his advice is contrary to CRA rules then you need to know exactly what law he is referring to and what was his source.

Otherwise we won't be able to help, neither will CRA know what he is talking about, nor an accountant.

Also, really your ex should be getting this specific information from his lawyer since the issue affects him.
 
Oh! That is a fantastic idea Mess.

Thank you! I will definitely do that. I will have to refile my taxes too so having that information will help (and I won't be able to screw it up. LOL.)

Thanks again.
 
Ironic I was just completing my T1158 and T1213 forms for 2013 this morning... remember you have to resubmit them (at least the T1213 ) every damn year it's a pain.
 
I emailed the lawyer last night and he replied this morning!

Although he didn't quote the specific source, he did say

The issue is not the timing of refiling but the characterization of the payments as “spousal support” without the benefit of a court order or separation agreement compelling the payment. (Stbx) made payments to you on a voluntary basis without a separation agreement or court order in place requiring him to do so. The payments were substantially in excess of his child support obligation and clearly at least some of same was “on account of spousal support.” In order for Revenue Canada to recognize a tax deduction on account of spousal support payments made on a voluntary basis, the payments must be made in the same year that an order or agreement is made or “in the immediately preceding calendar year.” Thus for (stbx) to get a deduction for payments in 2011 there had to be an order or agreement recognizing the payments in 2012 recognizing the payments as same. When you or (stbx) file or re-file to the best of my knowledge is irrelevant to the process, the issue is the date on the agreement.

So to answer my original question, as long as I signed by the end of 2012, he can refile anytime. And I guess our situation may be a little different because he paid voluntarily (and still is).
 
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